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Oil & Gas Pipeline Stocks Q2 Earnings on Aug 4: PBA & More

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As we are at the peak of the Q2 earnings season, this week is expected to see as many as 1000 companies reporting their financial results. Last week, 317 members of the S&P 500 index already reported their quarterly results. As we evaluate the results of these companies, we notice a slight sequential improvement in growth pace. However, growth for the benchmark S&P 500 index is likely to be negative for the fifth quarter in a row. In fact, eight of the 16 Zacks sectors (as of Jul 29) are projected to underperform.

With several oil pipeline companies yet to report their financial results, it is difficult to get a clear picture of the overall market condition. However, we remain bullish about the pipeline space as the ramp up of oil production over the past few years has resulted in the oversupply of the commodity in the market. This definitely boosts the need for storage and transportation services. Overall, we note that Q2 has raised optimism about oil price recovery, which fell to a 12-year low of $26.21 per barrel in February.

The prevailing trend in the oil and energy sector is well outlined in the Earnings Trends report. The general outlook for energy sector remains bearish as it is expected to register a massive 84% year-over-year decrease in earnings due to a 26% plunge in revenues. Excluding the impact of the energy sector, the S&P 500 index would witness earnings growth of 0.3%.

As of Jul 29, 2016, 56.8% of the oil and energy companies had reported Q2 earnings results. These stocks account for 79.7% of the total market capitalization. Total earnings for these index members plunged 76.5% from the year-ago period, while revenues declined 24.6%. We now wait to see how other energy sector bigwigs like Chesapeake Energy Corporation (CHK - Free Report) and EOG Resources, Inc. (EOG - Free Report) perform when they report their results later this week.

Meanwhile, let’s take a look at how these three oil & gas pipeline companies might fare when they post their Q2 results on Aug 4.

Pembina Pipeline Corporation (PBA - Free Report) is expected to release Q2 results on Aug 4, after the market closes. Our proven model does not conclusively show that Pembina Pipeline is likely to beat on earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 for this to happen. The company has an Earnings ESP of 0.00%. Though the company has a favorable Zacks Rank #3, a 0.00% Earnings ESP makes surprise prediction difficult.

PEMBINA PIPELN Price and EPS Surprise

PEMBINA PIPELN Price and EPS Surprise | PEMBINA PIPELN Quote

SemGroup Corporation is set to release Q2 numbers on Aug 4. SemGroup has an Earnings ESP of -28.57% as the Most Accurate estimate is pegged at 5 cents, while the Zacks Consensus Estimate stands at 7 cents. The company has a Zacks Rank #2 but a negative Earnings ESP complicates surprise prediction.

SEMGROUP CORP-A Price and EPS Surprise

SEMGROUP CORP-A Price and EPS Surprise | SEMGROUP CORP-A Quote

PennTex Midstream Partners, LP is slated to release Q2 results on Aug 4. The company has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate stand at 14 cents. Though company has a Zacks Rank #2, its 0.00% Earnings ESP makes surprise prediction difficult.

PENNTEX MIDSTRM Price and EPS Surprise

PENNTEX MIDSTRM Price and EPS Surprise | PENNTEX MIDSTRM Quote

Don’t miss out on our full earnings release articles for these three oil & gas pipeline stocks, as the actual results might hold some surprises!

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Chesapeake Energy Corporation (CHK) - free report >>

EOG Resources, Inc. (EOG) - free report >>

Pembina Pipeline Corp. (PBA) - free report >>